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Where is the ICT Labour Market Going — Part II

Morley Surcon By Morley Surcon,
Vice-President Strategic Accounts & Client Solutions, Western Canada at Eagle

In my last Talent Development Centre post, I spoke about the looming tech skills shortage. One that is beginning in the USA and is expected to be “exported” to the rest of the world. In this post, I’m taking the discussion a bit further by discussing a “leading driver” for this shortage — Digital Transformation Projects.

According to a recent Mulesoft Connectivity Benchmark Report, almost all companies surveyed are either implementing a digital transformation strategy or are planning to deploy one within the next 3 years. From the same report, the top 5 goals of digital transformation are reported to be: Increasing IT’s operational efficiency, improving customer experience, increasing business efficiency, introducing new products and services faster, and improving employee experience.

Is your company currently undertaking digital transformation initiatives?
Source: Mulesoft Connectivity Benchmark Report 2019

Strategies such as these, and the projects that follow, require heavy investments in technology and in the people needed to design, built, test and implement the new solutions. Unsurprisingly, given the huge number of organizations working towards this, there is a growing skills gap — one that threatens to impact the industry. According to Constellation Research, they found that IT and Business leaders now see this as the greatest threat to their strategy’s success. In fact, recent reports suggest that lack of talent/human capital is a leading factor impeding US economic growth. They are currently experiencing 50-year lows in their unemployment rate.

The Factors Impeding Digital Transformation

This is great news if you are an ICT contractor! ‚Ķespecially if you have the right, in-demand skills. From Eagle’s own experience across Canada, these skills/roles would include the following:

  • Project Managers
  • Business Analysts
  • Security/Cybersecurity
  • Cloud
  • BI, Data Analytics and Data Science
  • Business Transformation/Change Management
  • Agile Developers
  • Mobile Technologies Experts
  • SAP
  • AI/RPA/Automation Testing

In case there was any question whether the skill shortages experienced south of the border might make its way to Canada, the table below, created with data from e-Talent Canada, suggests that we are already at full-employment right across Canada (or already constrained in some regions).

ICT Employment Across Canada (December 2018)
Source: e-Talent Canada

These are exciting days to work in the field of Technology!

Where is the ICT Labour Market Going?

Morley Surcon By Morley Surcon,
Vice-President Strategic Accounts & Client Solutions, Western Canada at Eagle

Although there is no “crystal ball” when it comes to forecasting Labour Market trends, there are several sources that tend to be leading indicators if one looks in the right places. To begin, I will share a couple charts that provide historical insight into the Job Market in Canada:

The first was put together by Statista using data from StatsCanada and ICTC. It shows the trend for ICT unemployment rates to be consistently lower than the overall unemployment rates by about 4% in each of the past 15 years.

Unemployment rate of the ICT sector compared to the overall rate in Canada, from 2001 to 2017
Statista.com – Sources: StatCan; ICTC

The second chart was compiled with data from ICTC’s e-Talent Canada portal. It shows the ICT unemployment rates for the major cities in Canada.

ICT Employment Across Canada (December 2018)
Source: e-Talent Canada

I believe that these confirm the relationship to overall unemployment rates quite well. What these two charts suggest is that the ICT labour market is at full employment or is actually in a supply-constrained state across Canada.

I recently attended an industry conference in the USA where it was explained that the labour-supply situation in the USA is even more dire; there, they are calling it a crisis. This is important as the US typically leads Canada by 6 to 18 months in this respect and the trends that they see make their way to Canada eventually. These critical labour shortages are coming.

Although this can be good news if you are a contractor/consultant as it encourages rates to remain high and opportunities to be plentiful, it does provide headwinds for the industry as a whole. Automation and AI are becoming more mainstream and will certainly cover some of the gaps for more basic-level work. However, the presenters at the U.S. Conference suggested that a growing skills gap is forming. They estimate that of the open STEM positions that exist in the USA today, 1/3 remain unfilled. The people who are losing jobs due to technology do not have the necessary skills for the new, high-tech jobs that are being created. The staffing industry south of the border believes that, with remote-work becoming more mainstream, U.S. companies may begin hiring more foreign workers or move some operations out of country to tap other labour markets. It seems that the “labour-crunch” that has been predicted for decades has already begun in the States; and it is expected that they will export this shortage to the rest of the world, further impacting global labour availability. We at Eagle have collected anecdotal accounts of this happening now — American companies are reaching out to highly-skilled Canadian contractors to work as remote members of development teams, as architects, etc.

Interesting times are ahead. In a labour-constrained, gig-economy-friendly world, it will be a good business environment for highly-skilled consultants as the services they provide will be in high demand. However, competition for these open roles is expected to become more global. Over the upcoming years (and perhaps decades), countries will compete for skilled labour and their economic prosperity will depend on how well or poorly they attract highly skilled immigrant experts. Today, Canada is a strong competitor for global talent – this World Economic Forum article shows Canada ranking 3rd overall as a preferred destination for the global workforce behind the US and Germany. With the recent insular direction of US-politics and policies, Canada is further benefiting via the ease with which students and skilled workers can attain the necessary visas versus the USA. However, long term competitive advantages are not easily created or maintained. It will be interesting to see if “remote work on foreign projects” might be an answer for foreign, skilled workers who would prefer not to relocate but, rather, live/work in/from their own countries.

What have been your experiences and observations? Please share by adding a comment below!